House passes Senate-approved fiscal cliff bill

Published: Wednesday, Jan. 2, 2013 9:15 a.m. CST

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(Pool photo by Brendan Hoffman/Getty Images via Abaca Press/MCT)

President Barack Obama makes a statement following passage by the House of Representatives for tax legislation on Tuesday, January 1, 2013, in Washington, D.C. Vice President Joe Biden joined the president on stage.

By Lisa Mascaro and Kathleen Hennessey — Tribune Washington Bureau

(MCT) — WASHINGTON — The House gave final approval late Tuesday to a bill to rescind tax increases for the vast majority of Americans, but only after a day of closed-door debate among Republicans who were forced to allow a vote on a compromise many in their party bitterly opposed.

The final tally, 257-167, included 172 of the chamber’s Democrats and just 85 of the majority Republicans, far less than half. The second- and third-ranking Republicans, Eric Cantor of Virginia and Kevin McCarthy of California, were among the 151 in their party voting no. Speaker John A. Boehner, R-Ohio, casting a rare vote, and Rep. Paul D. Ryan, R-Wis., the Budget Committee chairman and 2012 vice presidential nominee, voted in favor.

The bill, approved by the Senate early Tuesday, allowed rates to rise for those with incomes above $400,000 for individuals and $450,000 for couples. It also renewed tax credits aimed at low-income households and college students, extended unemployment benefits, delayed automatic spending cuts in defense and other government programs for two months and resolved several other issues that Congress had left hanging.

What it did not do is match the ambitious goals set by President Barack Obama and Boehner for a “grand bargain” that would put the government on a path to a balanced budget. Instead, the compromise sets up another deadline two months hence for Congress to once again deal with the government’s budget.

That debate seems likely to be at least as bitter as this one. In the closing minutes of the House session, Democrats disputed Republican claims that the deal set a new permanent level of tax revenue for the federal government. Rep. Sander Levin, D-Mich., noted the president has vowed to seek more new tax revenue in the next round. Republicans countered that over-spending, not under-taxation, was the cause of the government’s problems.

Shortly after the vote, Obama hailed the passage as part of the “balanced” approach to deficit reduction he had sought, noting that it fulfilled his campaign pledge to raise taxes on the nation’s wealthiest citizens. Obama, who will sign the measure in coming days, took pains to praise leaders of both parties who corralled votes.

Speaking at the White House before leaving to rejoin his family on vacation in Hawaii, Obama called the compromise “just one step in the broader effort” to reduce the deficit and specifically pointed to spending on Medicare for an aging population as the major force driving the red ink.

“I am very open to compromise,” he said. But, he added, “we can’t simply cut our way to prosperity.” Solving the problem will require “further reforms to our tax code” to eliminate unjustified loopholes, he said.

Boehner, in a statement, said he would press for “significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt.”

The deal, largely negotiated by Vice President Joe Biden and Senate Republican Leader Mitch McConnell, R-Ky., blocked income tax increases for 99 percent of American households that were to go into effect at the turn of the year. It passed the Senate by a lopsided 89-8 vote, engineered by McConnell and Senate Majority Leader Harry Reid, D-Nev., to put as much pressure as possible on the House to follow suit.

But as House Republicans gathered early on New Year’s afternoon for the first of two private caucus meetings, many vowed to resist. The bill could be amended and sent back to the Senate, they said.

The mood did not last.

In the evening, Republicans held a second caucus meeting. This time, take-out Chinese food replaced sandwiches, and resignation subbed for defiance.

Several Republicans said afterward they feared that, if the bill failed and taxes went up on nearly everyone in the country, their party would take the blame.

“You do have to know when to hold ‘em and when to fold ‘em,” Rep. Steve LaTourette, R-Ohio, who is retiring this week, said as he emerged from the meeting. “We’ve been beaten (in) this fight.”

Even so, the decision by Boehner to bring the bill to a vote without the support of a majority of his caucus—the usual standard—rankled many Republicans. The compromise, they complained, did virtually nothing to cut spending. And while it kept the low George W. Bush-era tax rates for most Americans, the tax hikes it did contain were anathema to lawmakers who had sworn to oppose any increase. Indeed, passage of the bill in the Senate marked the first time in two decades that any Republican in Congress had voted for an income tax increase.

Concern over the next debate fueled much of the Republican opposition to the current bill. Some Republicans balked at the economic stimulus provisions — primarily the low-income tax breaks, which were a priority for Obama and House Democrats. They also objected that the bill would raise far more in tax revenues than it would trim in federal spending, which they worried set a bad precedent for future budget negotiations with the president.

Those concerns dominated the day’s first caucus meeting, in which Cantor told members he could not support the bill. Others pushed for a vote on an amendment to add spending cuts.

For a time, Republican lawmakers said they were fired up to fight the Senate deal — many wistfully recalling Boehner’s Plan B, which would have taxed incomes only above $1 million, roughly the top two-tenths of one percent of Americans. That bill never came to a vote because the speaker was forced to yank it from the floor last month amid GOP resistance.

As discussions continued into the evening, however, Republicans increasingly began to accept that they had little choice. Senate leaders had made clear they would not consider any changes to the bill — and a head count of GOP members indicated that even if an amendment were added to cut spending, a majority of the House would still oppose it.

Lawmakers also warily eyed the clock ticking toward morning, when the financial markets would begin reacting if the picture in Washington remained unsettled. Economists have warned for months that the combination of across-the-board tax increases and spending cuts would raise unemployment and potentially bring on a new recession.

Rep. Jack Kingston, R-Ga., a veteran member, said, “I think we’re at the time where people are tired.”

“The timing is people are ready to vote,” he said. “The Senate sat on their duffs all year, and they had a great 48-hour push, but for the House this really has been a long one-year process. We’ve gone as far as we can go, and I think people are ready to bring it to conclusion.”

“We have dealt with this issue long enough,” said Rep. Bill Young (R-Fla.) “Both sides have given; both sides have gotten.”

Democrats looked on in bemusement at the disarray across the aisle, muting their own internal disagreements. Biden held a closed-door session with Democrats. He called for party members to support the Senate bill despite concerns expressed by liberals, inside Congress and out, that it set too high a threshold for tax increases.

Influential outside conservative groups sent mixed signals to Republicans. Grover Norquist, author of the pledge against tax increases that most Republican members of Congress have signed, said a “yes” vote would not violate that promise, while the Heritage Foundation and tea party groups that have substantial influence over GOP conservatives called for the party to oppose it.

Former House Speaker Newt Gingrich took the opportunity to chide his one-time colleagues. “The GOP has been engaged in a two month dance of defeat and surrender!” he said in a Twitter message. “I hope tonight is the end of this self defeating strategy.”